The current correction in the stock market has brought the Standard and Poor's 500 down over the last two months from 1220 at the end of April 2010 to the end of June close near 1030.
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The correction has been severe, with only 7% of stocks currently trading above their 50-day moving average through June 29, 2010, according to Bespoke Investment Group. The worst hit industry was industrials where only 2% of stocks were trading above their 50-day moving average. Telecom was the winner, with only a third of telecom stocks in this category.
Despite the carnage, and unfortunately for investors, many stocks have much further to fall before reaching the lows hit during the bear market low of March 2009. There are, however, some large capitalization names that have fallen close to or below these levels, and bear some further research.
In mid-June, Nokia (NYSE:NOK) reduced its guidance for the second fiscal quarter, accelerating a decline in stock prices that started in April. The company blamed problems in its devices and services segment, where Nokia is facing tough competition at the high end of the market.
This is a politically correct way of saying that the company is losing the battle for market share in the smart phone area. Nokia now is guiding operating margins to be at the low end of a range of 11% to 13% in 2010. Standard & Poor's promptly changed its ratings outlook on the company from stable to negative, citing "material deterioration of the historically industry leading margins of Nokia's Devices and Services segment."
Monsanto (NYSE:MON) is trading far below the bear market low in March 2009, and closed at $46.22 at the end of June. The stock hasn't been at these levels since early 2007. The company released disappointing earnings last week, and established guidance for 2011 that might have been a little short of what investors wanted.
Boston Scientific (NYSE:BSX) is another stock below the March 2009 levels, and has been on a long-term downtrend for the last 12 months. The company had to issue a recall of one of its products earlier in the year, and reduced guidance after reporting first quarter earnings back in April 2010. Insiders have also been dumping shares all year.
On a positive note, Boston Scientific has moved to get its balance sheet in order and just announced the closing of a new credit line to be used in part to pay off debt maturing in 2011.
Apollo Group (Nasdaq:APOL) peaked at close to $90 a share back in March 2009 when just about every other stock was hitting a new low every day. Since then the company has lost 50% of its value settling into the low $40 range.
Apollo Group and the rest of the for-profit education industry has become the target of some prominent hedge fund managers over the last few months, with one even dubbing the industry as the "next sub prime." The industry is also heavily dependent on the government for assisting its students for aid, and any news regarding an interruption or more regulation on that aid can cause the stocks to go into freefall.
Some large capitalization stocks have already fallen below prices found at the nadir of the bear market reached in March 2009, and might represent an opportunity for those investors who have the courage to buy while others flee. However, investors need to carefully research these names before plunging forward as these stocks have company specific issues apart from the general market sell off. (Learn more, see: Adapt To A Bear Market.)
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